The United Arab Emirates is a country in West Asia, situated at the eastern end of the Arabian Peninsula, formed by the union of seven distinct emirates. These seven political units are the Emirate of Abu Dhabi, the Emirate of Dubai, the Emirate of Ajman, the Emirate of Sharjah, the Emirate of Ras Al Khaimah, the Emirate of Umm Al Quwain, and the Emirate of Fujairah. Abu Dhabi serves as the national capital and is the largest emirate, accounting for 87 percent of the country's total area, while Ajman is the smallest. The federation was officially established on the 2nd of December 1971, when six of the emirates agreed to enter into a union, with Ras Al Khaimah joining shortly after on the 10th of January 1972. The country is a federal semi-constitutional monarchy, governed by a Federal Supreme Council composed of the ruling sheikhs of each emirate. This council jointly appoints a federal president, who in turn appoints a prime minister to lead the cabinet. The political structure is unique in that it blends traditional tribal leadership with modern federal governance, where all responsibilities not granted to the federal government are reserved to the individual emirate. The UAE shares borders with Oman to the east and northeast, and Saudi Arabia to the southwest, while maintaining maritime borders with Qatar and Iran in the Persian Gulf. The population of the UAE has grown from approximately 550,000 in 1975 to over 10 million in recent years, with only 11 percent of the population being native Emiratis. The vast majority of inhabitants are expatriates and migrant workers, most of whom are from South Asia, creating a unique demographic landscape where the national population is a minority within their own country.
From Pearls to Petroleum
The economic history of the United Arab Emirates is a dramatic transformation from a subsistence-based society to a global economic powerhouse. Before the discovery of oil, the region's economy relied heavily on pearling, which provided income and employment to the people of the Persian Gulf. The pearling industry thrived during the 19th and early 20th centuries, but the First World War had a severe impact on the trade. The economic depression of the late 1920s and early 1930s, coupled with the invention of cultured pearls, wiped out the trade entirely. The remnants of the trade eventually faded away shortly after the Second World War, when the newly independent Government of India imposed heavy taxation on imported pearls. This collapse resulted in extreme economic hardship in the Trucial States, the precursor to the modern UAE. In 1922, the British government secured undertakings from the rulers of the Trucial States not to sign concessions with foreign companies without their consent. Aware of the potential for the development of natural resources such as oil, a British-led oil company, the Iraq Petroleum Company, showed an interest in the region. The first commercial discovery of oil in the Trucial Coast occurred in March 1958, when a floating platform rig struck oil in the Upper Thamama rock formation. This was followed by the first exports of oil in 1962. The discovery of oil in commercial quantities at the Murban No. 3 well on the 27th of October 1960 marked a turning point. As oil revenues increased, the ruler of Abu Dhabi, Zayed bin Sultan Al Nahyan, undertook a massive construction program, building schools, housing, hospitals, and roads. When Dubai's oil exports commenced in 1969, Sheikh Rashid bin Saeed Al Maktoum was able to invest the revenues from the limited reserves found to spark the diversification drive that would create the modern global city of Dubai. The UAE now has the world's seventh-largest oil reserves and seventh-largest natural gas reserves, but it has become less reliant on natural resources in the 21st century, increasingly focusing on tourism and business. The country has the most diversified economy among the members of the Gulf Cooperation Council, with a nominal gross domestic product of US$414.2 billion in 2018.